National Vision (EYE) Tops Q4 EPS by 10c, Revenues Beat; Offers FY20 EPS/Revenue Guidance Above Consensus

National Vision (NASDAQ: EYE) reported Q4 EPS of $0.11, $0.10 better than the analyst estimate of $0.01. Revenue for the quarter came in at $401.8 million versus the consensus estimate of $388.29 million.

Fourth Quarter 2019 Summary:

• Net revenue increased 12.9% to $401.8 million
• 72nd consecutive quarter of positive comparable store sales growth
• Comparable store sales growth of 10.1%; Adjusted Comparable Store Sales Growth of 8.1%
• Net income increased 121.3% to $3.9 million; Adjusted Net Income increased 735.5% to $8.7 million
• Adjusted EBITDA increased 37.9% to $39.6 million
• Diluted EPS increased 120.2% to $0.05; Adjusted Diluted EPS increased 692.0% to $0.11

Reade Fahs, chief executive officer, stated, “The fourth quarter represented a strong finish to another record year of revenues and profitability for National Vision, with double-digit growth in net revenue and Adjusted EBITDA in 2019. The team delivered our 72nd consecutive quarter of positive comparable store sales growth, demonstrating the consistency of our differentiated business model. Our fourth quarter and 2019 results reinforce our belief that our strong value message continues to resonate with patients and customers. We opened eight stores this quarter and continue to gain share in the attractive optical retail market. Last month, we were pleased to announce that, as we embark on our 30th year of optical partnership with Walmart, we will be operating five new additional Vision Centers. Every day, our 13,000-plus associates, including over 2,000 optometrists practicing in or next to our over 1,100 stores, continue to work hard to make quality eye exams and eyewear more affordable to our patients and customers throughout the United States.”

Fourth Quarter 2019 Highlights

• Net revenue increased 12.9% to $401.8 million from $355.9 million for the fourth quarter of 2018. Net revenue growth was positively impacted by 1.5% due to the timing of unearned revenue.
• Comparable store sales growth was 10.1% and Adjusted Comparable Store Sales Growth was 8.1% for the fourth quarter of 2019.
• The Company opened eight new stores, closed two stores and ended the quarter with 1,151 stores.
• Costs applicable to revenue increased 8.1% to $187.5 million from $173.5 million for the fourth quarter of 2018. As a percentage of net revenue, costs applicable to revenue decreased 200 basis points to 46.7% from 48.7% for the fourth quarter of 2018. This decrease, as a percentage of net revenue, was primarily driven by higher eyeglass margin, a higher mix of exam sales and lower growth in optometrist-related costs.
• Selling, general and administrative expenses (“SG&A”) increased 7.2% to $178.0 million from $166.1 million for the fourth quarter of 2018. As a percentage of net revenue, SG&A decreased 240 basis points to 44.3% from 46.7% for the fourth quarter of 2018. This decrease, as a percentage of net revenue, was driven by lower stock compensation expense and store payroll leverage, partially offset by higher performance-based incentive compensation.
• Net income increased 121.3% to $3.9 million compared to net loss of $18.4 million for the fourth quarter of 2018. Net margin increased to 1.0% compared to (5.2)% for the fourth quarter of 2018. Diluted EPS increased 120.2% to $0.05 compared to diluted loss per share of $0.24 for the fourth quarter of 2018.
• Adjusted Net Income increased 735.5% to $8.7 million compared to $1.0 million for the fourth quarter of 2018. Adjusted Diluted EPS increased 692.0% to $0.11 compared to $0.01 for the fourth quarter of 2018. The net change in margin on unearned revenue positively impacted year-over-year Adjusted Net Income growth by 298.7%.
• Adjusted EBITDA increased 37.9% to $39.6 million compared to $28.7 million for the fourth quarter of 2018. The net change in margin on unearned revenue benefited year-over-year Adjusted EBITDA growth by 14.6%. Adjusted EBITDA Margin increased 180 basis points to 9.9% from 8.1% for the fourth quarter of 2018, primarily due to higher eyeglass margin, store payroll leverage and the net change in margin on unearned revenue.

GUIDANCE:

National Vision sees FY2020 EPS of $0.80-$0.85, versus the consensus of $0.79. National Vision sees FY2020 revenue of $1.875-1.905 million, versus the consensus of $1.87 million.

For earnings history and earnings-related data on National Vision (EYE) click here.

You May Also Be Interested In

• Bristol-Myers Squibb (BMY) stock slips despite earnings beat
• Midday movers: Meta, IBM, Caterpillar fall; Chipotle rises
• Equinor ASA (EQNR) Tops Q1 EPS by 22c, misses on revenue